Vendor managed inventory (VMI), as it is commonly called, is a business method which relates to vendor (referred to interchangeably as "manufacturer", "supplier", "provider" or "seller"), and customer (referred to interchangeably as "receiver", "buyer" or "distributor") interaction in an effort to minimize the customer's share of the distribution cost associated with distributing a supplier's goods. Vendors that are able to reduce the customer's cost incurred with the purchase and distribution of the vendors' goods provide an added incentive for the customer to stock and sell more goods, if not full lines of the vendor's products.
A key feature in any conventional system integrating information relating to business transactions between a supplier and its customers is the use of a computer to receive and delegate inventory and invoice information, provided from either the supplier or the customer, and to generate an automatic electronic purchase order therefrom. Through various forms of supplier (manufacturer) and customer (receiver) interaction pursuant to the computer generated purchase order the process for the distribution of goods may be streamlined.
For example, U.S. Pat. No. 5,168,445 to Kawashima et al. discloses an automated ordering system for use in a retail shop that is adapted for automatically ordering frequently sold goods. The Kawashima system enables a stock caretaker, such as a shop manager, to understand and utilize factors of changing demand for individual goods in order to assist in the determination of an ideal order amount. The system then electronically determines and uses the ideal order amount as well as other electronically stored information, e.g., the status of the particular stock and factors affecting the stock's storage and use, to electronically determine an order amount and order the goods to replenish inventory.
The Kawashima system electronically generates the ideal order amount by correlating both point of sale data derived from the actual selling results and stock data relating to the actual stocked goods. The correlated data is then massaged according to information input by a user. Such information includes factors indicative of changing sales volume, events in the market area or bargain sale items in the shop, as well as more collateral information such as the weather, geographic place, selling status of other shops, and tradenames, to name a few. Calculations are then performed electronically on the data and order slips are automatically generated therefrom.
Although some parts of the Kawashima system are automatic, i.e., the manipulation of data and generation of the order slip, the system is nevertheless conventional in that it relies heavily on the user's contribution and input of data. The Kawashima system is not a fully automated electronic system. That is, once an electronic order is generated for a particular item or manufactured good, the order still must be communicated in some way by and to personnel, as with most conventional systems. No electronic means are provided for tracking and sharing of information relating to any business transaction taking place between a supplier and its customer.
In addition to automatically generating purchase orders, vendor managed inventory systems have attempted to provide users with the ability to streamline the shipping/receiving process. For example, U.S. Pat. No. 5,038,283 to Caveny discloses an electronic based shipping method for facilitating efficient distribution of goods between manufacturer and distributor. The Caveny shipping method requires the labeling of individual items for shipment with identification indicia, labeling a shipping container with container identification indicia and recording in a shipping location computer database the container and identification indicia and including a list of the items shipped in the container. A container packing record is electronically generated according thereto.
The Caveny shipping method electronically transmits the container packing record to a database that is accessible by a shipping destination computer at the shipping destination. There, a customer order list of identification indicia identifying items necessary to fill customer orders, and a list of indicia of containers received at the shipping destination are recorded in a data base. The shipping destination computer includes a program to compare the identification indicia of the items recorded in the container packing record of a received container with the identification indicia of the items in the customer order. The received container may thereby be directed to either general inventory or to an area for further shipping if need be bypassing the need to handle and check each item of the goods.
While the Caveny shipping method attempts to reduce some of the time and effort associated with the receipt and restocking (handling) of incoming shipments including the prompt filling of outstanding orders, the method still requires significant checking and handling in the form of routing incoming orders at the receiving area of the distributor location. In other words, the Caveny shipping method is concerned with accounting of goods shipped per order. The Caveny shipping method does not provide a way of electronically streamlining the communication process associated with the control and distribution of goods, including tracking business transactions such as auditing, price administration and adjustments.
It is therefore an object of the present invention to provide an electronic method for automatically tracking and controlling information related to a detailed level of business activities and sharing information related thereto between a supplier and receiver of goods and system for implementing the same.
It is another object of the present invention to provide a method of electronically processing business transaction information related to damaged materials, shortages or overages identified by a receiver of goods and an computer-based system implementing the same.
It is still another object of the present invention to provide an electronic business interface between a supplier and receiver of goods to enable the immediate sharing and auditing of all information related to all associated business activities.
It is yet another object of the present invention to provide a method of significantly lowering the overhead cost associated with certain business transactions carried out between a supplier and receiver of goods and an electronic system for implementing the same.
It is still yet another object of the present invention to provide a method of conducting business between a supplier and receiver of goods in which the number of personnel required to accomplish the same is minimized.